Centegra Health System posts $30.1 million loss so far this fiscal year

By KEVIN P. CRAVER -
kcraver@shawmedia.com

June 7, 2017

H. Rick Bamman

Caption

H. Rick Bamman file photo – hbamman@shawmedia.com
Centegra Hospital – Huntley has lost $30.1 million during the first three quarters of its fiscal year, according to reports.

CRYSTAL LAKE – Centegra Health System has lost $30.1 million during the first three quarters of its fiscal year, which it is attributing in large part to the cost of opening its new Huntley hospital and a rise in uncompensated care.

The Crystal Lake-based hospital reported the loss, which could increase to $40 million by the June 30 end of its fiscal year, in a May 3 filing with Fitch Ratings. But Centegra is maintaining that the loss is not because it cannot fill the 128 beds at the Centegra Hospital – Huntley facility it opened last August.

In a statement late Tuesday afternoon, Centegra spokeswoman Michelle Green said that although the Affordable Care Act has reduced the number of uninsured people, it did not ease the pressures that hospitals face when medical bills are not paid.

“Through the Affordable Care Act, there has been a dramatic shift to high-deductible plans through employers and through the state-run exchange. These plans place a heavy financial burden on patients who seek health care, and that is transferred to our health system if patients are unable to afford their care,” Green said.

The news comes as Centegra continues to work toward an affiliation with the Northwestern Medicine health system, which was first announced a year ago. Green said Centegra anticipates being part of the Northwestern system by the end of the year, pending regulatory approval. The agreement would require the approval of the Illinois Health Facilities and Services Review Board and the Federal Trade Commission.

With more than 4,000 workers, Centegra is McHenry County's largest employer.

Centegra also has stated that the new Huntley hospital began running up operational costs six months before its doors opened to orient staff and prepare it to serve patients.

"From the beginning, we planned for a financial loss and considered it an investment in the community," Green wrote.

Hospitals also are being hit hard by the ongoing fiscal woes in Illinois and uncertainty over Medicaid and the Affordable Care Act in Washington. Barring an unlikely bipartisan deal before the end of the month, the General Assembly will enter its third straight year without a budget. Its bill backlog, which stood at just under $14.7 million as of Monday, includes payments owed to hospitals.

Fitch downgraded Centegra's rating on its debt to BBB-, the lowest rating before going below investment grade. Its outlook is stable.